Chapter One - Overview > Financial Overview > page 9 of 16
| |

Financial Overview

Defence's Cash Position

Overview

Defence sources its annual cash from the appropriation for outcomes, from the equity injection, and from own source revenue, capital receipts and cash reserves. The allocations are subject to Government approval as part of the annual budget process. Once funds are appropriated for Defence purposes, they remain in Defence's accounts even if not fully used in the budget year. They are held as an appropriation receivable in the Official Public Account and are available to meet liabilities as they fall due, including employee liabilities, subject to Government approval.

Defence had planned to have cash reserves on hand at 30 June 2005 of $673m including cash at bank ($88m) and the appropriation receivable ($585m). In the event, Defence had cash reserves totalling $793m comprising cash at bank of $254m (see Table 1.5) and the appropriation receivable of $539m (see Table 1.7). Of the $120m increase in cash, an amount of $56m is to be repaid to Government in 2005-06 under no win - no loss arrangements. The remaining $64m will be carried forward in the appropriation receivable in 2005-06 to pay for purchases whose delivery dates were delayed beyond 30 June 2005.

Use of Cash in 2004-05

During 2004-05, Defence had access to $17,757m in cash including cash at bank on 1 July 2004 of $238m. During the course of the financial year Defence used $17,503m leaving it with cash at bank of $254m at 30 June 2005. This was $167m higher than forecast due mainly to a higher than planned level of cash in the United States Foreign Military Sales bank account. Table 1.5 provides details of cash sources and cash usage.

Table 1.5 shows the actual movement of cash in 2004-05.

Table 1.5 Use of Cash by Defence in 2004-05
2004-05
  Actual Result
$'000
Sources of Cash
2004-05 Opening Cash at Bank(1) 237,809
Appropriation Bills No 1, 3 & 5 (Price of Outputs) 15,692,146
Appropriation Bills No 2, 4 & 6 (Equity Injection) 392,798
Appropriation Bills Tsunami Financial Assistance Bills 50,941
Own-source revenue(2) 529,289
GST refund from Australian Taxation Office 833,240
Effect of Exchange Rate Movements 21,152
Cash from Official Public Account -
Sub-total: Cash Available 17,757,376
Use of Cash
Employee Payments 6,432,231
Suppliers 4,928,388
GST Expenses 822,294
Other operating expenses (grants, borrowing costs and other) 32,173
Purchase of Land and Buildings 279,580
Purchase of Specialist Military Equipment 2,965,265
Purchase of Property, Plant and Equipment 399,303
Purchase of Inventory 1,221,256
Repayments of Debt 109,753
Cash transfer to Official Public Account 312,709
Sub-total: Cash Used 17,502,951
2003-04 Closing Cash at Bank 254,425

Notes

  1. This figure represents the actual cash at bank of 1 July 2004, rather than what was in the estimates contained in the May Budget.
  2. Includes sale of goods and services, other revenue, proceeds from sale of assets and interest revenue.
| | « Previous | Home | Next » |